Dissolution of condominium. What to do if I do not want to share a property with another person.

Extinction of condominium

What is the extinction of condominium? It seems a complicated term to understand, but the concept is not really that complicated.

Imagine that you own a property with your brother or sister.

Now imagine that you no longer want to be the owner of that property, your brother or sister does not want to buy your share, but neither does he or she want to sell the property.

You will have to come to some kind of agreement or go to court to extinguish the co-ownership of the property.

That is to say, if you do not reach an agreement, it will be a judge who will dictate how the ownership of the property will remain and what money the person who keeps the property must pay to the person who ceases to be the owner.

Therefore, the extinction of the joint ownership is a legal procedure that allows to put an end to the situation of co-ownership of a property, such as a house, when one of the parties does not wish to continue sharing it.

How to dispose of a shared ownership of a real estate property

Let's start with a few key ideas:

If several people own a house, it does not mean that each owns a specific part such as a room or the kitchen. In reality, each owns an imaginary part of the whole house.

Often, all owners share full control of the house, which means that they can use it and do whatever they want with it.  This is called "freehold".

But it is also possible for someone to only own the house on paper (this is called "bare ownership", which is very different from "freehold"), without the right to live there or use it. In this case, they can let someone else live in and enjoy the house, even if they are not the owner on paper. This person who lives without owning the house is called a "usufructuary".

There are several ways to end this situation of shared ownership:

• if everyone decides not to share the property anymore,
• if the house is lost or destroyed,
• if one of the owners gives up his or her share, or if they divide the property.

However, there are limits to dividing the property. If the owners agreed to keep the property undivided with a limit that cannot exceed 10 years, they must respect that agreement.

Similarly, if the property cannot be easily divided without losing its value or function, a division cannot be forced.

Procedures to extinguish the joint tenancy

To extinguish the joint ownership or condominium, it is always better to do it out of court, especially because it is cheaper. For example, through mediation.

In the most conflictive cases, you will have no choice but to go to court, which will always be more expensive.

In this type of process it is essential to determine very well which property you want the co-ownership to end, the value of the properties and what part of ownership each owner has, as well as who will finally remain the sole owner.

The importance of the procedure for the dissolution of the condominium or joint ownership

The dissolution of joint ownership becomes very important in situations where the co-owners wish to terminate the common ownership of a property. The most striking cases are divorces, separations or inheritances.

Before proceeding with the termination of the joint ownership, it is important to take into account the necessary agreements and measures to facilitate the process, because each step is essential to reach the desired solution.

Out-of-court settlements

Best and most cost-effective option, at least for the co-owners. Out-of-court settlements are an amicable way to resolve the co-ownership situation.

They are based on the willingness of the co-owners to reach a mutually beneficial agreement, thus avoiding costly court proceedings.

Remember that in order to reach an agreement, all parties win and lose something, if you are not willing to lose anything do not waste time negotiating because it is clear that you do not want to.

Mediation in the extinction of joint ownership

Mediation is an effective tool for resolving disputes in the termination of joint ownership.

An impartial mediator helps the parties to reach a mutually acceptable agreement, thus facilitating a peaceful and equitable solution.

The mediator is a relatively new figure in the Spanish legal sector, but they are becoming important as they are objective figures who are specialists in getting the parties to reach agreements that free the judicial system from lengthy and costly procedures.

If we were to speak in cinematic terms, we would speak of "The Negotiator".

Judicial proceedings for the most conflictive cases

In more complex and, above all, conflictive situations of extinction of the condominium, there will be no other option but to resort to a judicial process to resolve the dispute between the parties.

In all cases, but especially in these, it is essential to have specialised legal advice to ensure that you exercise your rights properly and thus increase the chances of success in the solution you want.

Definitive extinction of the joint tenancy

As we have already mentioned, in the process of extinguishing the joint tenancy, it is essential to clearly identify the property subject to the application for the extinguishment of the joint tenancy.

A detailed inventory of the property must be carried out in order to determine which property will be the object of the extinguishment of the joint tenancy.

Once the property has been identified, it is necessary to proceed to its valuation in order to establish the amount in order to decide how the joint ownership is to be extinguished and the amount of the extinguishment.

This valuation must be carried out in an objective and transparent manner, taking into account the proportion of ownership of each co-owner.

For example, if no agreement is reached on the valuation of the property, a legal expert will be appointed to carry out the valuation. This is not cheap either.

The adjudication of the property is the final step in the process of extinguishing the joint ownership of a property.

In this phase, it is determined who will finally take ownership of the property or the property in question, taking into consideration the agreements reached between the parties or, failing that, the court's decision.

Financial and Tax Aspects

When the joint tenancy is extinguished and ownership of a property ceases, certain aspects must be taken into account, one of the most important of which is the tax and financial aspects.

Mortgage Liabilities

In the process of extinguishing the joint tenancy, it is essential to take into account the mortgage liabilities associated with the property.

In the event that the property is encumbered with a mortgage, i.e. the mortgage for the purchase of the property is still being paid, whoever takes possession of the property must assume the corresponding mortgage debt.

It is important to carry out a detailed analysis of the mortgage situation of the property in order to avoid possible complications in the future.

Taxes and Costs Associated with the Extinguishment

When extinguishing the joint tenancy, it is also necessary to take into account the taxes and costs associated with this process.

There are costs and taxes that must be properly managed and settled to ensure the correct termination of the joint ownership.

It is advisable to have specialised advice in order to understand and comply with all the tax and financial obligations arising from the termination of the joint ownership.

Alternatives for the extinction of joint ownership

Extinguishing a joint ownership in order to cease to be co-owner of a property is not always the best option. That is why we always advise you to be well advised.

There are alternatives, not only legal ones, that can terminate the ownership without having to go to a process of extinction of condominium, and much less, having to go to court, which will always be more expensive.

Division of the property

One of the alternatives for the extinction of the joint ownership is the division of the property, which involves dividing the property among the co-owners.

This process requires determining precisely how the division is to be carried out, ensuring fairness in the distribution and taking into account the preferences and needs of each party.

This alternative is only possible if the property to be divided is not rendered unusable and is rather the case when each party owns 50% of the property.

Sale of the property and distribution of the proceeds

Another option is the sale of the shared property. Particularly when it comes to real estate, this option is without doubt the most profitable one.

With the sale, a price is obtained for the transaction that must be distributed among the co-owners according to the ownership percentages.

For example, a property has 3 owners, one owns 50% of the property and the other two own 25% each. The property is sold for €100,000.

• The owner who owns 50% of the house will get €50,000.
• The other two owners will get €50,000 each.

It is important to clearly establish the market value of the property and the terms and conditions of the sale to ensure a fair and transparent transaction.

This may be the best option in the event of a dispute.

Why it is important to turn to Lawyers specialised in joint-ownership extinguishments

Seeking the help of lawyers who specialise in the process of extinguishing joint ownership is essential to ensure that your rights to the property are not infringed.

Our expert lawyers have the knowledge and experience necessary to carry out the entire process properly.

By turning to our lawyers with extensive experience in the termination of joint ownership, as a co-owner of a property, you will be able to rely on professionals who are experts in the current legislation applicable to this type of procedure.

This will give you the peace of mind of knowing that you have at your side professionals you can trust, who have both the experience and the necessary knowledge to ensure that the operation is as successful as you are looking for.

Furthermore, the process of extinguishing a joint-ownership can be complex and delicate, so having this advice will ensure that the process is managed correctly and efficiently.